U.S. TREAS Form treas-irs-982-2000
Form
982
(Rev. September 2000)
Reduction of Tax Attributes Due to Discharge of
Indebtedness (and Section 1082 Basis Adjustment)
Department of the Treasury
Internal Revenue Service
䊳
Part I
1
a
b
c
d
2
3
Attachment
Sequence No.
Attach this form to your income tax return.
Name shown on return
OMB No. 1545-0046
General Information (see instructions)
Amount excluded is due to (check applicable box(es)):
Discharge of indebtedness in a title 11 case
Discharge of indebtedness to the extent insolvent (not in a title 11 case)
Discharge of qualified farm indebtedness
Discharge of qualified real property business indebtedness
2
Total amount of discharged indebtedness excluded from gross income
Do you elect to treat all real property described in section 1221(a)(1), relating to property held for sale to
customers in the ordinary course of a trade or business, as if it were depreciable property?
Part II
Yes
No
Reduction of Tax Attributes (You must attach a description of any transactions resulting in the reduction in basis under section
1017. See Regulations section 1.1017-1 for basis reduction ordering rules, and, if applicable, required partnership consent statements.)
Enter amount excluded from gross income:
4 For a discharge of qualified real property business indebtedness, applied to reduce the basis of
depreciable real property
5 That you elect under section 108(b)(5) to apply first to reduce the basis (under section 1017) of
depreciable property
6 Applied to reduce any net operating loss that occurred in the tax year of the discharge or carried
over to the tax year of the discharge
7 Applied to reduce any general business credit carryover to or from the tax year of the discharge
8 Applied to reduce any minimum tax credit as of the beginning of the tax year immediately after
the tax year of the discharge
9 Applied to reduce any net capital loss for the tax year of the discharge including any capital loss
carryovers to the tax year of the discharge
10 Applied to reduce the basis of nondepreciable and depreciable property if not reduced on line
5. DO NOT use in the case of discharge of qualified farm indebtedness
11 For a discharge of qualified farm indebtedness, applied to reduce the basis of:
a Depreciable property used or held for use in a trade or business, or for the production of income, if
not reduced on line 5
b Land used or held for use in a trade or business of farming
c Other property used or held for use in a trade or business, or for the production of income
12 Applied to reduce any passive activity loss and credit carryovers from the tax year of the discharge
13 Applied to reduce any foreign tax credit carryover to or from the tax year of the discharge
Part III
94
Identifying number
4
5
6
7
8
9
10
11a
11b
11c
12
13
Consent of Corporation to Adjustment of Basis of its Property Under Section 1082(a)(2)
Under section 1081(b), the corporation named above has excluded $
from its gross income
for the tax year beginning
, and ending
.
Under that section the corporation consents to have the basis of its property adjusted in accordance with the regulations prescribed
under section 1082(a)(2) in effect at the time of filing its income tax return for that year. The corporation is organized under the
laws of
.
(State of incorporation)
Note: You must attach a description of the transactions resulting in the nonrecognition of gain under section 1081.
General Instructions
Section references are to the Internal
Revenue Code unless otherwise noted.
Purpose of form. Generally, the amount by
which you benefit from the discharge of
indebtedness is included in your gross
income. However, under certain
circumstances described in section 108, you
may exclude the amount of discharged
indebtedness from your gross income. Unless
you check the box on line 1d or make the
election on line 5, the amount excluded from
gross income reduces certain tax attributes
either dollar for dollar or 331⁄3 cents per dollar
(see below).
Use Part I of Form 982 to indicate why any
amount received from the discharge of
indebtedness should be excluded from gross
income.
Use Part II to report your reduction of tax
attributes. The reduction must be made in the
following order:
● Any net operating loss (NOL) for the tax
year of the discharge (and any NOL carryover
to that year) (dollar for dollar);
● Any general business credit carryover to or
from the tax year of the discharge (331⁄3 cents
per dollar);
● Any minimum tax credit as of the beginning
of the tax year immediately after the tax year
of the discharge (331⁄3 cents per dollar);
● Any net capital loss for the tax year of the
discharge (and any capital loss carryover to
that tax year) (dollar for dollar);
For Paperwork Reduction Act Notice, see back of form.
Cat. No. 17066E
● Basis of property (dollar for dollar);
● Any passive activity loss (dollar for dollar)
and credit (331⁄3 cents per dollar) carryovers
from the tax year of the discharge; and
● Any foreign tax credit carryover to or from
the tax year of the discharge (331⁄3 cents per
dollar).
Use Part III to exclude from gross income
under section 1081(b) any amounts of income
attributable to the transfer of property
described in that section.
Definitions. A “title 11 case” is a case under
title 11 of the United States Code (relating to
bankruptcy), but only if you are under the
jurisdiction of the court in the case and the
discharge of indebtedness is granted by the
court or is under a plan approved by the
court.
Form
982
(Rev. 9-2000)
Page
Form 982 (Rev. 9-2000)
The term “discharge of indebtedness”
conveys forgiveness of, or release from, an
obligation to repay.
You are “insolvent” to the extent your
liabilities exceed the fair market value (FMV)
of your assets immediately before the
discharge.
For details, get Pub. 908, Bankruptcy Tax
Guide.
When to file. File Form 982 with your timely
filed Federal income tax return (including
extensions) in a year a discharge of
indebtedness is excluded from your income
under section 108(a). Also file this form if you
elect to reduce the basis of depreciable
property under section 108(b)(5) or if you are
making the election on line 1d of Part I
regarding the discharge of qualified real
property indebtedness.
These elections may be revoked only with
the consent of the IRS.
Note: If you timely filed your tax return
without making the election, you can still
make the election by filing an amended return
within 6 months of the due date of the return
(excluding extensions). Write “Filed pursuant
to section 301.9100-2” on the amended
return and file it at the same place you filed
the original return.
Specific Instructions
Part I
Lines 1a through 1c. If you check any of
these boxes, you may elect, by completing
line 5, to apply all or a part of the debt
discharge amount to first reduce the basis of
depreciable property (including property you
elected on line 3 to treat as depreciable
property). Any balance of the debt discharge
amount will then be applied to reduce the tax
attributes in the order listed on lines 6
through 13. You must attach a statement
describing the transactions that resulted in
the reduction in basis and identifying the
property for which you reduced the basis. If
you do not make the election on line 5,
complete lines 6 through 13 to reduce your
attributes. See section 1017(b)(2) and (c) for
limitations of reductions in basis on line 10.
The exclusion relating to insolvency does
not apply to a discharge that occurs in a title
11 case. Also, the exclusions relating to
qualified farm indebtedness and qualified real
property business indebtedness do not apply
to a discharge that occurs in a title 11 case
or to the extent the taxpayer is insolvent.
“Qualified farm indebtedness” is the amount
of indebtedness incurred directly in connection
with the trade or business of farming. In
addition, 50% or more of your aggregate
gross receipts for the 3 tax years preceding
the tax year in which the discharge of such
indebtedness occurs must be from the trade
or business of farming. For more information,
see sections 108(g) and 1017(b)(4).
The discharge must have been made by a
“qualified person.” Generally, a qualified
person is an individual, organization, etc.,
who is actively and regularly engaged in the
business of lending money. This person
cannot be related to you, be the person from
whom you acquired the property, or be a
person who receives a fee with respect to
your investment in the property. Also, a
qualified person includes any Federal, state,
or local government or agency or
instrumentality thereof.
If you checked line 1c and did not make
the election on line 5, the debt discharge
amount will be applied to reduce the tax
attributes in the order listed on lines 6
through 9. Any remaining amount will be
applied to reduce the tax attributes in the
order listed on lines 11a through 13.
You cannot exclude more than the total of
your: (a) tax attributes (determined under
section 108(g)(3)(B)); and (b) basis of property
used or held for use in a trade or business or
for the production of income. Any excess is
included in income.
Line 1d. If you check this box, the discharge
of qualified real property business
indebtedness is applied to reduce the basis
of depreciable real property on line 4.
“Qualified real property business
indebtedness” is indebtedness (other than
qualified farm indebtedness) that: (a) is
incurred or assumed in connection with real
property used in a trade or business; (b) is
secured by that real property; and
(c) with respect to which you have made an
election under this provision. This provision
does not apply to a corporation (other than
an S corporation).
Indebtedness incurred or assumed after
1992 is not qualified real property business
indebtedness unless it is either: (a) debt
incurred to refinance qualified real property
business indebtedness incurred or assumed
before 1993 (but only to the extent the
amount of such debt does not exceed the
amount of debt being refinanced) or
(b) qualified acquisition indebtedness.
“Qualified acquisition indebtedness” is:
(a) debt incurred or assumed to acquire,
construct, reconstruct, or substantially
improve real property that is secured by such
debt; and (b) debt resulting from the
refinancing of qualified acquisition
indebtedness, to the extent the amount of
such debt does not exceed the amount of
debt being refinanced.
You cannot exclude more than the excess
of the outstanding principal amount of the
debt (immediately before the discharge) over
the net FMV (as of that time) of the property
securing the debt, reduced by the
outstanding principal amount of other
qualified real property business indebtedness
secured by that property (as of that time).
See Regulations section 1.108-6(a) for
definitions of net FMV and outstanding
principal amount. The amount excluded is
further limited to the aggregate adjusted
bases (as of the first day of the next tax year
or, if earlier, the date of disposition) of
depreciable real property (determined after
any reductions under sections 108(b) and (g))
you held immediately before the discharge
(other than property acquired in
contemplation of the discharge). Any excess
is included in income.
Line 2. Enter the total amount excluded from
your gross income due to discharge of
indebtedness under section 108. If you
checked line 1a, 1b, and/or 1c, this amount
will not necessarily equal the total reductions
on lines 5 through 13 because the debt
discharge amount may exceed the total tax
attributes.
See section 382(l)(5) for a special rule
regarding a reduction of a corporation’s tax
attributes after certain ownership changes.
2
Line 3. You may elect under section
1017(b)(3)(E) to treat all real property held
primarily for sale to customers in the ordinary
course of a trade or business as if it were
depreciable property. This election does not
apply to the discharge of qualified real
property business indebtedness. To make the
election, check the “Yes” box.
Part II
Line 7. If you have a general business credit
carryover to or from the tax year of the
discharge, you must reduce that carryover by
331⁄3 cents for each dollar excluded from
gross income. See Form 3800, General
Business Credit, for more details on the
general business credit, including rules for
figuring any carryforward or carryback.
Line 10. In the case of a title 11 case or
insolvency (except when an election under
section 108(b)(5) is made), the reduction in
basis is limited to the aggregate of the bases
of your property immediately after the
discharge over the aggregate of your liabilities
immediately after the discharge.
Part III
Adjustment to basis. Unless it specifically
states otherwise, the corporation, by filing this
form, agrees to apply the general rule for
adjusting the basis of property (as described
in Regulations section 1.1082-3(b)).
If the corporation desires to have the basis
of its property adjusted in a manner different
from the general rule, it must attach a request
for variation from the general rule. The
request must show the precise method used
and the allocation of amounts.
Consent to the request for variation from
the general rule will be effective only if it is
incorporated in a closing agreement entered
into by the corporation and the Commissioner
of Internal Revenue under the rules of section
7121. If no agreement is entered into, then
the general rule will apply in determining the
basis of the corporation’s property.
Paperwork Reduction Act Notice. We ask
for the information on this form to carry out
the Internal Revenue laws of the United
States. You are required to give us the
information. We need it to ensure that you are
complying with these laws and to allow us to
figure and collect the right amount of tax.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB control
number. Books or records relating to a form
or its instructions must be retained as long as
their contents may become material in the
administration of any Internal Revenue law.
Generally, tax returns and return information
are confidential, as required by section 6103.
The time needed to complete and file this
form will vary depending on individual
circumstances. The estimated average time
is: Recordkeeping, 5 hr., 44 min.; Learning
about the law or the form, 2 hr., 11 min.;
Preparing and sending the form to the IRS,
2 hr., 22 min.
If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler, we
would be happy to hear from you. See the
instructions for the tax return with which this
form is filed.